Plug into a computer modem and slash price of your calls

Wendy Jones, 40, manages a small business selling stationery and educational materials.

She often works from home and wanted to set up a dedicated phone service, believing a landline gives a more professional impression than a mobile number.

And mobile phone reception is patchy where she lives in Willingham, Cambridgeshire, with husband Christopher, 46, a sales director, and their children, Tilly, 20, Charlotte, 15, and Joseph, 13.

Instead of fixing a new landline, which can cost more than £100 just for the connection, Wendy decided to use Voice-over-Internet Protocol (VoIP) technology with a company called Vonage.

Calls are made via a broadband connection, like Skype but without face-to-face video messaging.

Wendy pays £5.99 a month for all calls and is thinking about scrapping her fixed line.

‘I used to pay £20 a month for phone calls and line rental, then I took a phone line as part of a package when I moved to Virgin Media,’ she says.

‘But now I’ve tested Vonage to check it all works, I could take the landline element off the deal.’

To make the service work, Wendy plugs a small unit into her broadband modem and can use any phone handset to make calls.

Wendy says the quality of the line is clear and she can forward calls to her mobile when she leaves the house.

If the internet fails, because of a power cut, for example, calls are also automatically diverted to her mobile.

As mobiles take over, fewer people have landline phones than ever before – but those who do are paying more. The cost of line rental has risen by up to 50 per cent over the past five years, from an average £10 a month to £15. Many households keep a fixed line to make it easier and cheaper for friends and family to call. Here is how to shrink the cost.

Do you need your landline?

Households rely more and more on mobile phones to make calls and browse the internet, with increasingly sophisticated handsets offered at falling prices.

You can get a free iPhone 5 with plenty of calling minutes and unlimited internet data for about £30 a month and a free Samsung Galaxy with unlimited data and 500 minutes for less than £30 a month. Both are two-year contracts.

The Carphone Warehouse launched a
£17-a-month deal for an iPhone 4 on Friday, the cheapest iPhone contract
it has ever issued. Carl Cowling, group commercial director, says:
‘Going back ten years, the landline was the focal point for
communications in the home. Now everyone has their own number.’

For
the millions with all-inclusive deals allowing internet use and free
calls on top, it is hard to see why anyone would still need a fixed
line. But most households with broadband inevitably pay for line rental
anyway – because the service is supplied via the same copper phone
lines.

But there are
still some positives to having a landline. It suits customers with poor
mobile phone reception at home, small business owners who want a more
professional set-up when working from home and people calling family
abroad, who typically pay more for international calls from a mobile.

Does BT have a monopoly on landlines?

Yes.
Most phone and broadband connections are via BT’s telephone exchange.
However, BT Openreach has had to open up its network to other operators,
such as Sky, AOL and Plusnet.

But
even if you pay Sky or any other internet provider for your line
rental, the company will still have to pay something to BT for using its
infrastructure. So, most of those who have broadband are also tied into
paying monthly line rental, regardless of whether they use the home
phone or not.

Can I abandon the fixed connection altogether?

Yes.
But if you still want a broadband connection there are only two ways to
get rid of fixed-line charges – either by signing up to a cable package
with Virgin Media or by using mobile broadband.

Virgin
Media offers fast, unlimited broadband via its own cable network for
£17.50 per month for the first three months and £22.50 after that, with
no need for a phone line. Alternatively, a dongle or MiFi unit lets you
surf the internet via the mobile phone network.

The
latest in mobile broadband is 4G, which offers faster and more reliable
connections than its 3G predecessor. EE dominates this market, but
other providers are expected to launch rival offers this year. Dongles
with 4G are priced between £13 and £21 a month.

But
if your mobile phone works only when standing on a chair in the
bedroom, mobile broadband would probably be useful only when out and
about since it depends on good mobile network coverage.

How can I pay less?

If you have to keep the landline then bundling line rental with a TV, internet or home phone package can be cost-effective.

For
example, line rental is £14.50 when a customer signs up to a £21.50
monthly package with Sky, which includes TV, a small broadband data
allowance for light users and free weekend calls.

Direct
Save Telecom offers a £2.49 monthly broadband and calls deal for a
year, with an allowance for medium to heavy internet users at 20GB, free
weekend and evening calls – and line rental is £9.95 per month if paid
as a lump sum in advance, or £13.75 monthly.

Alternatively,
switching to a simple line rental-only deal (for those who do not make
regular calls on the home phone) can shrink household bills. Moving from
BT’s standard monthly payment of £15.45 to Primus Saver at £8.25 saves
£86 over a year.

Charlie
Ponsonby, chief executive of broadband and phone comparison service
Simplifydigital, says: ‘Prices have risen rapidly in the past few years,
so if you have not switched recently we thoroughly recommend comparing
deals to see whether you could save money.’

Websites such as Simplifydigital and Cable are Ofcom-accredited and compare offers.